The office of General Counsel issued the following informal opinion on February 12, 2002, representing the position of the New York State Insurance Department.

Re: Minimum automobile insurance requirements

Question Presented:

Can an insurance company contract with an insured to provide less than the legally mandated personal injury protection coverage in an automobile insurance policy in exchange for a lower premium?


No. New York State Law specifies the minimum requirements for motor vehicle financial security coverage as a matter of public policy. There are a number of other possible ways to reduce the cost of the total automobile insurance premium. For example, one can choose not to purchase optional automobile insurance coverages, one can request higher deductibles, and one can purchase automobile safety or security devices or take a driver safety course.


No specific facts were provided. It is the inquirer’s opinion that the automobile insurance requirements interfere with his contractual rights as a consumer.


N. Y. Veh. & Traf. Law § 311(4)(a) (McKinney 1996) defines an owner’s policy of liability insurance to include a minimum liability protection of $25,000 for injuries to, and $50,000 for the death of, one person in any one accident, and subject to said limit for one person, double those figures for two or more persons, and $10,000 in property damage liability coverage. This statute also provides that an insurer may offer more, but not less, coverage than the statutory minimum required to register a vehicle under N. Y. Veh. & Traf. Law Article 6 (McKinney 1996).

N. Y. Ins. Law § 5103(a) (McKinney 2000) requires every owner’s policy of liability insurance issued in satisfaction of N. Y. Veh. and Traf. Law Article 6 (McKinney 1996) to also provide coverage for payment of no-fault first party benefits. N.Y. Ins. Law § 5102(b) (McKinney 2000) defines "first party benefits" as payments to reimburse a person for up to $50,000 of basic economic loss on account of personal injuries arising out of the use or operation of a motor vehicle, minus deductions and deductible. "Basic economic loss" is defined in N.Y. Ins. Law § 5102(a) (McKinney 2000). In addition, N. Y. Ins. Law § 3420(f)(1) (McKinney 2000) requires each automobile liability insurance policy to provide uninsured motorist protection.

For further information concerning potential savings on automobile insurance costs, please see the Insurance Department’s Consumers Guide to Automobile Insurance available on the Department’s website at under Publications. Page seventeen of the guide contains a discussion of how to save money on automobile insurance.

For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.